Monday, March 22, 2010

What House Passage of the Senate Health Bill Means for America

New Middle-Class Taxes. The President solemnly promised that he would not impose any new taxes on American households making less than $250,000. The Senate bill shatters this promise.

For example, the excise tax on high-cost health insurance plans would overwhelmingly hit middle-class taxpayers. Likewise, special federal premium taxes in the Senate bill would also be passed down to consumers, resulting in premium increases that would be higher than they would otherwise be.[6] In addition to taxes on health insurance, the Senate bill would also create new taxes on medical necessities such as prescription drugs and medical devices.[7]

Beyond these new taxes, the President’s proposal would add yet another provision (presumably for consideration in the budget reconciliation process) that would tax investment income. This would result in 115,000 lost job opportunities and a net reduction of $17.3 billion annually in household disposable income.[8] Amidst a recession, this is a stunningly bad idea.

Increased Health Insurance Premiums. The President initially promised that Americans would see a $2,500 annual reduction in their family health care costs. But under the Senate bill, premiums would go up for millions of Americans. In fact, according to the CBO, estimated premiums in the individual market would be 10–13 percent higher by 2016 than they would be under current law.[9]